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No Deduction of Tax at source

mukundasy (manager) (97 Points)

18 August 2009

Dear All,

We have rented out our furnitures and fixtures to a company on a hiring basis. In this case our customer have to deduct TDS at specified rates while making payment to us.

As per sec. 197, we have applied on 18 June 09, for issuance of certificate for no deduction of tax at source. But until today, the certificate has not been issued by the department. Can we instruct our customer not to deduct TDS by claiming that we have applied for the certificate. For any of your answers, can I get the same quoting section number.

Please treat the matter as urgent.

With Regards,

Mukunda

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3 Replies

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 18 August 2009

U ACN SAY TO YOUR CUSTOMER NOT TO DEDUCT TDS AS WHEN THE CERTIFICATE IS ISSUED IT IS FOR THE WHOLE FINANCIAL YEAR AND THERE WILL BE NO VIOLATION. THERE IS NO SECTION NO. OF THAT.IF YOU GO AS PER SECTION 194-I, YOUR CUSTOMER WILL HAVE TO DEDUCT TDS IF THERE IS NO CERTIFICATE FOR LOWER OR NO DEDUCTION OF TAX PRESENT. BUT IT IS A CUSTMARY PRACTICE IF YOU HAVE APPLIED FOR SUCH CERTIFICATE.

IN CASE U RECEIVE A REJECTION FOR CERTIFICATE INTINMATE IT TO YOUR CUSTOMER TO DEDUCT TDS ON NEXT PAYMENT INCLUDING TDS WHICH OUGHT TO BE DEDUCTED EARLIER ALSO ALONG WITH THE REGULAR ONE.

HOPE I AM CLEAR TO YOU.

REGARDS,

RITESH KOTHARI

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mukundasy (manager) (97 Points)
Replied 18 August 2009

Mr. Ritesh Kothari,

Thanks for the reply.

Please let me know about the validity of the certificate. For ex: if the department issues the certificate on 18 August 09 stating that no TDS has to be deducted for the financial year 2009-10, does it apply for the whole of financial year or it stands good from 18 August 09, that is whether TDS has to be deducted for the payments made prior to 18 August 09.

With Regards,

Mukunda